I. Field of the Invention
The present invention relates generally to systems, methods, and apparatus for issuing credit cards. More particularly, the invention relates to systems, methods, and apparatus for instantly issuing credit cards using a remote dispenser.
II. Background and Related Information
Credit card products have become so universally well known and ubiquitous that they have fundamentally changed the manner in which financial transactions and dealings are viewed and conducted in society today. Credit card products are most commonly represented by plastic card-like members that are offered and provided to customers through credit card issuers (such as banks and other financial institutions). With a credit card, an authorized customer or cardholder is capable of purchasing services and/or merchandise without an immediate, direct exchange of cash. With each purchase, the cardholder incurs debt which the cardholder may thereafter pay upon receipt of a monthly or otherwise periodic statement. In most cases, the cardholder will have the option to either fully pay the outstanding balance or, as a matter of necessity or choice, defer at least a portion or the balance for later payment with accompanying interest or finance charges for the period during which payment of the outstanding debt is deferred.
The spending power of a credit card (i.e., the total amount of funds available to the cardholder at any particular time for making purchases) is typically limited to a particular amount predetermined by the issuer of the card. This amount is commonly referred to as the “credit limit” of the credit card. The size of the issuer-imposed credit limit is generally based on a number of non-exclusive factors, the most important of which are often the cardholder's earning capacity and the cardholder's credit history. When purchases are made or debts incurred with the credit card, the available portion of the credit limit is reduced by the purchase or debt amounts. In addition, interest and/or finance charges are also subtracted from the available portion of the credit limit on a periodic basis. The total debits on a credit card are referred to as the “outstanding balance”, while the remaining or available balance of the credit limit is typically called the “available balance” and reflects the dynamically adjusted current spending power of the credit card. The cardholder may increase the available balance up to the credit limit, by paying to the issuer (or its representative) the entire outstanding balance or a fractional portion thereof.
Credit card offers are typically sent to potential customers via regular mail. The issuer of a credit card may offer potential customers a particular credit card by disclosing the terms and conditions of the credit card product (e.g., annual fees, interest rate(s) and finance charges, etc.) and the credit limit of the credit card that may reach a stated maximum upon qualification. When a credit card application is returned by a customer, the amount of the credit limit is generally determined by the issuer based on various factors, such as the customer's credit history and earning capacity.
This traditional strategy for issuing credit cards, however, does not work effectively for a large segment of U.S. households that are either self-banked or un-banked. Self-banked households are those households that rely on non-bank institutions, such as check cashing outlets (CCOs), pawnshops, payday loan outlets, and rent-to-own stores. Un-banked households are those households that lack any formal relationship with a bank. Traditional approaches for offering credit cards to these households do not work for several reasons, for example, secured credit cards offered by mail have a very low response rate from this segment. At the same time, however, non-secured credit cards are not a good option for this segment, because of the high percentage of charge offs in this segment.
In view of the inability to effectively serve the self-banked and un-banked households there is a need for systems, methods, and apparatus for offering credit cards to this segment without undue high risks to the institution offering such credit cards.